MARKET WATCH: NYMEX oil prices drop on Fed minutes

Crude oil futures prices on the New York market closed slightly lower Nov. 20 after the US Federal Reserve released the minutes of its October meeting that indicated central bank officials could begin tapering an economic stimulus in coming months.

An anticipated phased reduction in the stimulus program could be triggered “at one of its next few meetings” if economic conditions merit, said the Fed’s monthly minutes released late in the NYMEX trading session.

The Fed’s $85 billion/bond-buying program supports NYMEX crude prices by weakening the US dollar, making oil less expensive to buy with other currencies.

Gasoline and diesel prices rose on NYMEX Nov. 20 after a weekly inventory report from the US Energy Information Administration showed strong demand for products. Total motor gasoline inventories fell by 300,000 bbl for the week ended Nov. 15, EIA said (OGJ Online, Nov. 20, 2013).

In a separate gas storage report issued Nov. 21, EIA reported 3.789 tcf of gas in underground storage as of Nov. 15, marking a net decline of 45 bcf from the previous week. Stocks were 89 bcf less than last year at this time and 15 bcf above the 5-year average of 3.774 tcf.

Energy prices

The New York Mercantile Exchange December crude contract fell 1¢ on Nov. 20 to settle at $93.33/bbl on the last day of trading for that contract. The January 2014 contract decreased 4¢, settling at $93.85/bbl.

Heating oil for December delivery was up 4.87¢ to settle at $2.91/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for December delivery increased 2.35¢ to a rounded $2.62/gal.

The December natural gas contract on NYMEX gained 11.8¢ to settle at a rounded $3.67/MMbtu. On the US spot market, the gas price at Henry Hub, La., declined less than a penny to settle at $3.62/MMbtu.

In London, the January 2014 ICE contract for Brent crude oil rose $1.14, settling at $108.06/bbl. The ICE gas oil contract for December increased 25¢ to $911/tonne.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $104.58/bbl on Nov. 20, down 44¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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